Clarendon Lectures in Finance

Microstructure in a Theory of Finance

In the third lecture, Maureen O’Hara discussed the design of rules and procedures for trading assets (market microstructure) and their influence on the efficiency of markets. She considered three classes of rules - market rules, trading systems and trading procedures - and described how they affect such measures of market efficiency as errors in prices, bid-ask spreads and the profits of different participants in the market. One of the functions of market microstructure is to encourage participation by uninformed as well as informed investors. She showed how exchange rules can do this and result in different classes of investors and firms trading on different types of markets.

About Maureen O'Hara

Robert W. Purcell Professor of Finance
PhD, Northwestern University

Professor O'Hara's research focuses on issues in market microstructure, and she is the author of Market Microstructure Theory (Blackwell:1995) as well as numerous journal articles. Her most recent research has focused on the role of underwriters in the aftermarket trading of IPOs, the impact of transparency on trading system performance, listing and delisting issues in securities markets, designing markets for developing markets, and the role of liquidity and information risk in asset pricing. In addition, Dr. O'Hara publishes widely on a broad range of topics including banking and financial intermediaries, law and finance, and experimental economics.

Professor O’Hara is the executive editor of the Review of Financial Studies. She has served as president of the Western Finance Association, and as president of the American Finance Association. Professor O’Hara is on the board of directors of Investment Technology Group, Inc. (ITG), an agency brokerage firm, where she serves as lead director and chair of the compensation committee. Professor O’Hara is also chairman of the board of Catholic Charities of the Diocese of Rochester. She has consulted for a number of companies and organizations, including Microsoft, Merrill Lynch, Credit Suisse First Boston, the New York Stock Exchange, Bristol-Meyers Squibb, and the World Federation of Exchanges.

Professor O'Hara joined the faculty at Cornell in 1979. She has held visiting faculty appointments at UCLA, the London Business School, the University of New South Wales, the Hong Kong University of Science and Technology and Cambridge University. She earned her BS in economics from the University of Illinois and her MS in economics and PhD in finance from Northwestern University.

About the Clarendon Lectures in Finance

"In 1987 Oxford University Press established the Clarendon Lectures in Economics, the first in what has become a wide range of Clarendon Lectures series. The Press sponsors the visit to Oxford of a distinguished economist who delivers three public lectures to undergraduates, graduates and faculty members from Oxford and nearby universities. The lectures form the basis of a book which is published by the Press. Many of these books have made a notable contribution to the literature.

To reflect the growth of the academic study of Finance in Business Schools and Economics Faculties generally and in particular in our own Said Business School the Press has established a series of Clarendon Lectures in Finance.

Past Clarendon Lectures

Clarendon Lecture 2004

Click here for slides and articles

Clarendon Lecture 2003

Banking Crises

Currency Crises

Bubbles and Crises

Clarendon Lecture 2002